Key development indicators as a leadership tool

Methods for measuring employee development, and not just performance, are increasingly important to today’s managers

By Dr. Bob Aubrey

 

Everyone knows what Key Performance Indicators (KPIs) are for. They measure, monitor and report how individuals, teams, business units and companies perform. KPIs are important, but they are far from everything.  Having worked in human development for over thirty years, I decided to propose a new concept called Key Development Indicators (KDIs) as a way to balance the important measurements that KPIs leave out.
 

Why can’t we use KPIs for development? Company strategies need measurable goals for development - not performance - when it comes to the creation of new products and services, entering new markets or improving talent. Inside these business strategies KDIs point to indicators which KPIs cannot measure. Development requires a different language, a different way of assessing results.
 

Development means that something is getting better. With KDIs you can specify what better looks like; you can set goals and indicators.
 

You can create milestones to track progress. You can specify what feedback you want to get. You can communicate your results. You can even define new concepts for management, such as developing identity as a leadership concept if you know how to set up the KDIs.
 

In corporate strategy and operations, both KPIs and KDIs are needed but their purpose, indicators, measurement cycles and sources of information are different. The following table shows these differences.
 

 

 

KPI
(Key Performance Indicator)

KDI
(Key Development Indicator)

Purpose

  • Match business performance goals to organizational / individual objectives
  • Match business development goals to organizational / individual  development

Indicators

  • Focus on actions
  • Measure results
  • Numerical assessment
  • Focus on learning
  • Measure development
  • Behavioural assessment

Time

  • Short term
  • Linked to business cycle
  • Short & Long term
  • Linked to development cycle

ROI

  • Performance targets
  • Productivity
  • Profitability
  • Growth or Change targets
  • Talent
  • Quality & Innovation

 

To see how KDIs make a difference, let’s take the example of service. Before the quality movement in the twentieth century, service was not something you measured – it was an action of economic exchange and a relationship of server to a master or a client. With the quality movement and the globalization of services, numbers became useful to measure service quality.
 

To manage a hotel, for example, you can make up a guest satisfaction index. But if you go into the kitchen and talk about the quality of the food then you must use words to describe what tastes good and looks appetizing – food is the domain where chefs are the experts. You go to the hotel lobby or the room and want to know if the decor is inviting and beautiful. Again you don’t use numbers; you need words, colours, opinions and you have to understand the language of designers and decorators.
 

Why managers resist KDIs
 

The transition to KDIs is not a new management fad – it is hard for business leaders to strategize with a new set of indicators and hard for managers to develop people and measure what they do in a new way.  But companies have used KDIs for strategy and others have used them for HR and people management.

But HR, talent and leadership professionals should not underestimate the difficulty in adding KDIs to the measurement mix. So ingrained is the logic of KPIs that it may seem like more trouble than its worth at first. It is only when managers see the advantages of measuring development that they will adopt it. You can compare it to introducing a new IT system, at first there is going to be some resistance.
 

Here is an example of four KDI areas that people managers can use to measure the really important job of developing people:

 

 

KDIs Areas for Leading Development

 

Job Learning

Coaching

Mentoring

  • Job rotation
  • Job enhancement
  • Projects
  • Feedback on development needs
  • Learning new skills
  • Self-directed learning plan
  • Cross-learning from colleagues
  • Development reviews
  • Network building
  • Career aspirations
  • Professional identity
  • Exposure to non-linear career paths

 

These indicators are really useful for managers in on-the-job development, employee reviews and career development dialogues with their team members.
 

In a recent British Chamber of Commerce roundtable event on KDIs, many of the participants agreed that two more conditions would have to be present for a successful introduction of KDIs. The first is senior management involvement. The second is putting KDIs into the bonus mix for managers along with KPIs.
 

Many companies have begun to use KDIs, and they are clearly starting to impact the business because they have been incorporated into annual reporting.

 

About the Author
 

Dr. Bob Aubrey shared the ideas of his new book, Measure of Man, with the participants of the British Chamber of Commerce hosted event in May 2016.
 

Bob has led a varied career as an entrepreneur, writer, teacher, business consultant and representative of international institutions. He is Senior Advisor for Asia at the European Foundation of Management Development.  As a writer, he has published 8 management books on the themes of work, learning and human development.
 

For more information visit https://www.amazon.com/Bob-Aubrey/e/B001K7C0P0

 
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